While I think this will be a great improvement (assuming I don’t lose too much battery life) I think there are other features that are even more important. Here’s my short “it better have…” list:

GPS / Geolocation
I don’t care how they do it (a hybrid would be ideal) but putting in a source location is unacceptable. First gen, I forgive you. Second gen, give me my current location.

MMS
What modern phone can’t do multimedia messages? Come on guys, we need this. And please let us send to more than one recipient at a time.

Video Capture
You’ll see a trend here: if it’s pretty standard on phones that cost a third of the price, I want it on my iPhone. Besides, it’s just wrong to have a device that displays video so well but can’t capture any.

iChat
Instant messaging. The year 2008. Seriously.

Copy and Paste
Gestures, magic, however you want to accomplish it — you can’t give me such a solid multitasking experience and then not allow me to move text between the apps.

Bonuses

In addition to those musts, here are a few that would be really nice:

The ability to easily tether to Apple laptops for Internet access

A file browser

A terminal interface

Improved camera resolution

32G of storage (16G would be “o.k.”)

A faster method of navigating contacts

Bluetooth syncing

If you can think of any features that belong in one of these lists, let me know.: